The announcement of Indonesia’s new capital got traction because a design of the proposed Presidential Palace embodies a Garuda (vehicle of Lord Vishnu) i.e. also the national emblem of Indonesia. It appeared that the Muslim majority nation was connecting with its Hindu past.
In short, the declaration of Nusantara was seen in India through the lens of Hindu-Muslim instead of Indonesia – China.
Before analysing impact of the proposed change here are titbits of information that I picked up from numerous media reports.
1. Nusantara means archipelago. Indonesia is a chain of 17,000 plus islands.
2. Nusantara shall be made in the island of Borneo and shall occupy 256,000 hectares in East Kalimantan.
3. App cost of construction $ 32 billion (Rs 2,40,000 crores)
4. Indonesia owns the majority of Borneo island. Malaysia and Brunei hold parts of its northern region.
5. Gaja Madha, prime minister of the Majihit Empire and its Hindu ruler Hayam Wuruk, took an oath that he would not take any spice till he conquered all of Nusantara. Madha, in all probably meant he would stick to his vow until he conquered present day Singapore, Malaysia, Brunei, southern Thailand, and Timor Leste to the south western Phillipines which he did and unified the entire archipelago. Source according to a report by South China Post. It is believed that Gaja Madha took the empire to the peak of its glory.
6. Gaja Madha is a national hero who inspired Indonesia’s struggle for independence.
7. Luke Hunt wrote in The Diplomat, “Nusantaria was a name that denoted much of Southeast Asia when it was little more than isolated sea-faring ports and sultanates dictated by trade winds as opposed to nation-states and the sovereign borders that make-up Indonesia and the ASEAN of today.” Source
8. The new capital will be a low-carbon "super hub" that will support pharmaceutical, health and technology sectors.
9. “East Kalimantan was mandated as it sits in the middle of the Indonesian archipelago and is one of the safest locations in terms of the earthquakes, volcanic eruptions, and tsunamis that accompany the nation’s position in the Pacific Rim of Fire.” Source
10. To its north Borneo has the South China Sea and Celebs Sea to its east.
11. “According to East Kalimantan governor Isran Noor, Indonesia is open to foreign investments, including from Beijing, to help it build infrastructure in the new capital city.” South China Post report of 2019
12. The capital includes Special Economic Zones of Maloy Batuta Trans Kalimantan.
The points that need attention are –
The term Nusantara was in earlier times meant to include part of nations that are now part of South-east Asia. Does this name for the new Indonesian capital imply that Indonesia, like China, is seeking to regain control of territories that its kings once controlled?
The fact that the term Nusantara was coined during rule of a Hindu king means nothing and should not be a source of joy for Bhakths! Indians should look at this development through the prism of India-China and China’s plans for the Pacific Ocean. What China does in this region might strengthen its plans for the Indian Ocean.
Who is going to fund the $ 32 billion cost of the new capital?
The state budget is said to fund 19.2% of the cost mainly in building infrastructure, 54.6% through public private partnerships and 26.2% by private sector for transport, communication and renewal energy (2020 report).
According to this report in Asia-Nikkei.com, "Since the beginning I said the government has been rash with infrastructure development. And the peak of the rashness will be the capital city," Faisal Basri, political economist at the University of Indonesia, told a webinar last week, citing Indonesia's declining tax revenues and widening fiscal deficit. But David Sumual, chief economist at Indonesia's largest private lender, Bank Central Asia, thinks despite its rising debt-to-GDP ratio -- 29% pre-pandemic to a projected 41% this year -- Indonesia still has a relatively strong fiscal position compared with other countries. He also thinks major projects like the new capital city might be what Indonesia needs to stimulate the economy.”
Although China might not be the flavour of the month in Jakarta, what happens if the Indonesian government runs short of cash or the PPPs do not materialize? Will China do a Sri Lanka to Indonesia? Anyway, given China’s strengths it shall surely have a significant stake in the expected private sector investment.
Would China use its capital, resources and labour to build the new capital? Only time will tell! If that happens, it shall stimulate demand in China, contribute to its economic growth and have geopolitical implications too.
Further, the Special Economic Zones are likely to be populated by Chinese companies. Could Indonesia be a vehicle to help Chinese companies export products to North America, West Asia and Europe?
With China, trade and military affairs are intertwined? If Indonesia takes loans from China and fails to repay, will it handover land or SEZ’s in Borneo to China or be given possession of some of Indonesia’s strategically placed islands (to build military bases) that shall help counter U.S. influence in the region?
One does not know how things shall pan out. One can look at crystal ball glazing as a conspiracy. However, it is important however for India to monitor these developments closely. A China that gets stronger in ASEAN might not be in India’s interest.